I’ve said it repeatedly since the debut of this blog: the mobile market is one of the radio industry’s most important areas to focus on. In the two-and-a-half years since I’ve been writing for Radio2020, I’ve repeatedly returned to the topic. The meteoric rise in both capabilities and adoption of the Droid, Blackberry and iPhone alone prove my point; just look at the plethora of radio apps for them.

The debut of the iPad and its competitors adds a new dimension to this evolution. While new to the market, it expands the range of what is considered “mobile,” while attempting to create a new niche in the existing array of available products. If sales are any indication, they seem to be doing a good job of it. It’s just the latest step away from the traditional computer.

Jeanette Borzo of The Wall Street Journalwrote a terrific column on the subject from which I’d like to share a few key points:

Earlier this year, Cisco Systems Inc. (CSCO) Chief Technology Officer Padmasree Warrior said she expects 1 trillion mobile devices to be connected to the Internet by 2013, compared with just 500 million in 2007.

On Wednesday morning, DreamWorks Animation SKG Inc.’s (DWA) Jeffrey Katzenberg said he believes Apple’s iPad and other upcoming tablet devices represent the future of computers and media consumption, especially among younger people. Katzenberg himself said he no longer uses a laptop, relying instead on an iPad and a BlackBerry cellphone. “The laptop is yesterday’s news,” he said.

For some, moving beyond the PC era–which many say started when Microsoft Corp. (MSFT) went public in 1985–means a rejuvenation of business.

“Mobile is the second coming of radio,” said Vivian Schiller, president and chief executive at National Public radio, adding that Internet-based radio gives listeners more choices. “All the devices are so easy to take with you, and you can listen to any stream you want. When I’m in my car, I no longer have to be restricted to my local radio station.”

Another aspect that I find fascinating is that due to the nature of these devices, there is a native prejudice in favor of audio content — things you can be entertained by while driving or walking. As the level of ubiquity increases for mobile devices, Ms. Schiller’s “second coming of radio” comment above becomes more and more valid.

The two things that are most important to look at are the decoupling of the Internet from the computer, and radio’s embrace and leveraging of that same Internet. Is your radio station ready?

Followers of Chicago radio are well aware of the show that embattled former Illinois Governor Rod Blagojevich has been hosting since shortly after the scandal broke. WLS-AM has pulled the show from the air pending the completion of Blagojevich’s corruption trial.

The hiatus was announced during his appearance on the Don Wade and Roma Morning Show last Wednesday. The Huffington Post reports the following statement made on the show:

“Out of respect for the legal process, WLS radio is putting the Rod Blagojevich Show on ‘hiatus’ effective immediately,” Operations Director Drew Hayes wrote in a statement read by Wade and Roma. “After the trial has concluded, we will review the status of the program.”

Whichever way things go, this should be fascinating radio coverage, especially as Blogojevich intends to take the stand. Chris Meincke at ABC Chicago brings us Mr. Blagjevich’s own words on the subject:

“I never could understand these politicians who said they never did anything wrong and then when they’re given the chance to say they didn’t do anything wrong, where it matters in court, they don’t do it. So, yes, I’m gonna do it and Patti’s gonna do it. We have the truth on our side,” said Blagojevich.

It has been very interesting watching the course of his radio program, and I wonder if we will see it return to the air. I also wonder if his on-air presence will influence the jury selection. After all, radio is everywhere and he has had more than ample time to disseminate his views.

If found guilty I doubt his show will be renewed. But if he is innocent? What do you think?

Smartphones have done so much for radio listeners. Your local station is often available wherever a wi-fi signal can be accessed, for one thing. Add in a lot of the perks that are becoming standard on radio apps such as tagging and time shifting, and there is no doubt that these mobile devices are a boon to us.

Clear Channel’s iHeartRadio app is a great example, and one that has recently gotten a facelift. It now sports over 750 channels, on-demand traffic reports and a brand new array of subscription content.

The idea of subscription-based content is not new; in fact, it is the backbone of satellite radio’s approach. Finding a successful way to monetize in that fashion is another matter. Still, their initial effort is in the realm of talk radio — a format whose following is loyal to say the least. I could easily see talk aficionados falling in love with both the accessible archives and the on-demand gratification aspects.

“We’re always looking for innovative ways to keep our audiences connected to their favorite talent and programming,” said Evan Harrison, EVP Clear Channel Radio and President of the Company’s digital unit. “The addition of commercial-free programs and hundreds of new stations delivers an unprecedented level of choice.”

It looks like they’re off to a running start. I’ll be keeping an eye on this one because I’m curious as to whether we will see continued growth or a slow down and plateauing effect once the app has been out for a while. As always, attempts to find viable ways to monetize without alienating the audience is worth observing. You never know where the next breakthrough will be coming from.

BIA/Kelsey has raised its outlook for the radio industry this year based on first-quarter results from a number of radio ownership groups. Combining this data with other market intelligence and a renewed optimism for the industry as a whole, they now expect a 3.7 % increase in radio revenues. In dollars and cents, that works out to a hefty $14.21 billion. The revised forecast was published in the second edition of BIA/Kelsey’s quarterly “Investing In Radio® Market Report.” This version of the report includes numbers on Internet- and mobile-based work being done in the radio sector as well as traditional broadcast.

Take a look at their projections as they stand now:

I’m happy to see the upward trend displayed here. I’m also very pleased to my own assertions about the massive importance of online and mobile efforts substantiated in their findings.

“In order for radio to maintain its position in the wider local media marketplace, it needs to continue to grow its broadcast revenues concurrent with its digital prospects,” said [Mark] Fratrik [vice president, BIA/Kelsey]. “Returning to revenues that were last seen by the radio industry in the early part of the last decade will come from utilizing traditional over-the-air assets combined with mobile and other digital solutions.”

I would be willing to guess that these numbers will increase again further down the line. The introduction of the iPad and similar tablet devices should cause an expansion of mobile use through the creation of their own niche in the digital ecosystem.

Since its introduction, I have written extensively here about the Performance Rights Act (PRA). The PRA, sponsored in the House of Representatives by Rep. John Conyers, would require traditional radio stations to pay performance royalties as well as the ones that are already paid to the songwriter. On the surface it seems like a good idea, but examination reveals its flaws quite readily.

One of the most worrisome flaws being the effect that the legislation could have on minority-owned stations. Of course, like everything else pertaining to this act, there is viscous argument on the subject. Elliot Millner at BlackVoices hit on some excellent perspectives in his recent post on the subject:

The main beneficiary of the Performance Rights Act (if passed) would not be the recording artists whose music is being played; it would be the record labels, who would reap the benefits of most of the royalties collected, just as they receive the majority of the money from artists’ album sales. Also, the main beneficiaries of the Performance Rights Act not passing would not be black radio; it would be large broadcast radio corporations, both black-owned and others, which would escape having to compensate artists for using their music.

Despite the fact that the post contains an overall hostile stance towards large broadcasters, you’ll notice he agrees with my stance that the labels, not the artists, would be the primary beneficiaries of the PRA. I propose that this underscores the validity of my assertion.

He goes on to share his excoriating opinions of big broadcasters, but then at the end of the post comes a fascinating observation:

This is yet another unfortunate instance of divide and conquer: Instead of attacking the entities (record labels) that are whoring them both, radio broadcasters and artists have chosen to go to war with each other. Ultimately, the only winner in this drama will be the record companies, who will continue to prosper (relatively speaking) in tough times, while those that should be waging war against them continue to foolishly attack each other.

Now, I’ve often commented on the fact that it’s a shame that so many artists are unable to see how the labels are leveraging them. High-profile spokesmen are terrific for any cause. I had not, however, given consideration to the “divide and conquer” aspect of the struggle.

Despite our differing on a few things, I think that Mr. Millner and I agree on several aspects of the situation. Somehow I don’t think getting “played” by the labels will be as good for the artists as getting played on the radio has been.

Well, it looks like the BBC is jumping into the iPhone arena — hardly shocking since streamed audio is huge on the Apple handset. Just look at the success of iHeartRadio, Pandora, AOL Radio and other audio/radio apps. Combine that huge listener base with America’s love of British TV — Dr. Who is the number one television show purchased on iTunes, for example — and they have a tempting market just waiting.

The new app, BBC Listener, does not provide access to all BBC radio programming. Rather, it supplies a selection of programs mostly from Radio 4. These can be streamed for immediate listening or downloaded for later. Still, for anglophiles, even that will be a treat. It also has a nice interface; I particularly like the old-fashioned radio tuner it displays when you turn the iPhone on its side. The Beeb has a nice video walk-through of the app up on YouTube so you can see how it looks and operates before purchasing. [BBC Listener Promo – YouTube]

So, you really want your BBC radio. You pay $2.99 for the app — a reasonable price — and you’re good to go, right? Wrong. The app uses the iPhone’s in-ap subscription function to charge the $12.99 per quarter subscription fee. Even that sounds reasonable to me, but I’m a longtime fan of British media. PaidContent:UK‘s Robert Andrews notes the rather large flaw in his recent review:

But BBC Listener may not be all that good value – many of the shows contained within are available as free downloadable podcasts, as well as for web playback, no matter where in the world listeners are. For example, here’s BBC World New America reporter Matt Frei’s Americanashow, all 51 episodes of it.

Maybe some users will be happy to pay to have all this wrapped inside a single app, but there’s another stumbling block – NPR in the States does at least as good a job at radio news and documentary, and all its apps, like its podcasts, are free.

So, is it the new British Invasion or is will the BBC’s monetization efforts flounder? What do you think?

It is always worthwhile to take a look at what the investment community thinks of an industry when assessing its status. Not always right by a long shot, but it’s usually a decent indicator of that industry’s health. With that in mind, I try to look at what investors and their advisors are saying about radio on a fairly regular basis.

Rick Aristotle Munarriz of the high-profile investment website The Motley Fool finds the rumors of radio’s imminent demise to be grossly exaggerated. He responds to The New York Times article I wrote about a few days ago, and brings up some interesting points that I had overlooked.

As Internet connectivity reaches out for the highway, there are still concerns that will limit its adoption and subsequent growth. Highest on this list is the price of connectivity, a severe barrier in these economic times:

Connectivity doesn’t come cheap these days. Music developers aim first for Apple‘s (Nasdaq:AAPL) pricey iPhone before trickling down to other devices. A monthly iPhone plan through AT&T starts at $70, and that’s for just 450 voice minutes and no text messages. The pricing schedule ramps up quickly, topping out with a $120 plan for unlimited minutes and texting. AT&T does offer attractive family plans for additional lines, but we’re essentially talking about a device with a limited audience in terms of affordability.

I can attest to this as an iPhone user myself. Add in the fact that the coverage is spotty, particularly in high density areas like New York City, and you begin to see the picture. He also addresses the new trend of mobile hotspots. While these can potentially enhance in-car Internet access, the one he reviews carries a hefty $60 per month price tag after purchasing the unit. Not exactly a small subscription fee.

So in all honesty, it’s hard to imagine more than half of the country paying $100 or so for smartphone plans, or $60 a month for mobile hotspots. The potential market is big enough to dent terrestrial radio, but it won’t obliterate AM and FM altogether.

An astute observation. As bandwidth expectations and more sophisticated handsets increase, I think we will see these prices escalate rather than decrease. It is, as I stated in my prior post, great to be able to get my hometown and college radio stations from halfway across the country. It is also lucky for me that I am one of the ones who can afford to do so, a proposition that becomes much more expensive when you take it on the road.

When people think of civil rights issues, they tend to think of the obvious things: racial profiling, job discrimination, etc. In real life, things are rarely quite so neat. This is a truth that civil rights proponents are well aware of. Lately, many of the higher profile names in this arena have begun to cast their eyes upon the Performance Rights Act (PRA). Politic365 recently did a special report about this, leading off with this quote:

[…] as Rev. Al Sharpton told Politic365, “often it is the quiet bills, the obscure bills, the so-called “specialized” bills, the bills no one seems to know much about, that can hurt Black folks the most if we’re not paying attention.” A textbook example, according to Rev. Sharpton and other civil rights advocates interviewed byPolitic365, is the “Performance Royalty” legislation that many advocates believe would throw Black radio into a deep tailspin.

Anyone familiar with the ways of Washington is aware of the way that bills are often attached to higher priority legislation in order to pass. It is a daily occurrence on Capitol Hill. In addition, the impact of this legislation on minority-owned radio has long been a bone of contention, inspiring truly bipartisan efforts on both sides of the issue.

But now the heavy hitters from the civil rights scene are weighing in on the legislation and their thoughts on the PRA are not exactly complimentary. Here is another example drawn from the same report:

MMTC [Minority Media and Telecommunications Council] warns that “misinformation is circulating in the civil rights community suggesting that the legislation will not harm minority radio. In fact, black and Spanish radio would be hit the hardest by this legislation because these stations face the greatest challenges” – including weaker signals, advertising discrimination, and the FCC’s failure to enforce its equal employment opportunity rules. MMTC reports that it has conservatively estimated that the legislation would throw at least a third of minority owned stations over the cliff into bankruptcy. The National Association of Media Brokers (NAMB) agrees, adding that “the imposition of a performance royalty on free, over-the-air broadcast stations will be crippling to the broadcast industry in general, and be particularly devastating to minority broadcasters and their audiences, as well as to other new entrants to the industry.”

This is particularly distressing if you take into account the research findings referenced in the Politics365 special report. According to that report, the value of radio airplay directly translates to approximately $2 billion in annual music sales, and that number excludes radio’s promotional impact on concert and merchandise based income.

Opponents of the Performance Rights Act include civil rights luminaries such as the Rev. Al Sharpton, Dick Gregory, and Tom Joyner. In addition, fifteen members of the Congressional Black Caucus have also expressed their concerns, including Elijah Cummings, Danny Davis, Al Green, John Lewis, Charlie Rangel, and Bobby Rush. That is one impressive roll call if you ask me.

In the end, though, it was Rev. Sharpton who posed the vital question of the day:

“Why in the world would the Democrats at the Commerce Department do this to Black radio – and to radio period? It doesn’t make sense from a political, social or economic perspective. If it passes, this bill would have a devastating effect on Black communities.”

Everybody’s talking about Kagan. Elena Kagan, that is — President Obama’s new nominee for the U.S. Supreme Court. I have a feeling that the Recording Industry of America (RIAA) in particular will be paying attention due to her history on the subject of fair use, especially since this history includes the following (as reported by Eriq Gardner at The Hollywood Reporter):

Hollywood’s biggest worry about Kagan might be her philosophy on intellectual property matters. As dean of Harvard Law School from 2003 to 2009, she was instrumental in beefing up the school’s Berkman Center for Internet & Society by recruiting Lawrence Lessig and others who take a strongly liberal position on “fair use” in copyright disputes.

Most notably, during those years, Professor Charles Nesson at the Berkman Center represented accused file-sharer Joel Tenenbaum in the defense of a lawsuit by the RIAA. Professor Nesson led his cyberlaw class in alleging that “the RIAA is abusing law and the civil process” with excessive damage claims in piracy cases. It was Kagan herself who wrote a personal letter to the U.S. District Court to help certify the students.

That stance on fair use could be a distinct boon to the radio industry in the ongoing battle against the Performance Rights Act (PRA). Add in prior actions adversarial to the RIAA and you can see why they and their allies could well be nervous of her prospective position.

Ironically, the Obama administration later weighed in on the side of the RIAA in the case. But it was before Kagan was fully confirmed as U.S. Solicitor General. At the time, Professor Nesson expressed some doubts about whether Kagan would back the government’s amicus brief and also called her “enlightened” on these issues.

So, it is reasonable to have hope of her support if she makes it to the Supreme Court, especially in light of nearly a century of proven economic benefit shown to artists through free airplay. I would think the fair use argument stands on solid ground when that stance is taken.

Of course, her stance on other issues could complicate things for broadcasters, but I have not yet concluded my research in that regard. No matter what, it is worth carefully watching as she goes through the vetting process. If she does get the position, I would like to think that we would win back some ground.